After the public hue and cry over Employees’ Provident Fund (EPF) tax issue, Central Board of Trustees (CBT) will hold a meeting on March 17 and trade unions will raise their voice against the Budget proposal of taxing EPF withdrawals in the meeting.
“We have received the notice for 212th meeting of the Central Board of Trustees (CBT) on March 17. We will definitely raise the issue of taxing EPF withdrawals as proposed in the Budget by Finance Minister Arun Jaitley,” All India Trade Union Congress Secretary and EPFO trustee Dl Sachdev said.
“All trade unions will condemn and oppose the proposal which will directly affect the workers. The issue is not listed on agenda but we will raise it in the meeting,” he added.
On the other hand, sources, however, said that the Government might either rollback the Budget proposal or reconsider several options to cushion the impact of the issue on the salaried middleclass.
“The decision will be announced by the Finance Minister will during the current session of Parliament,” it said, adding that a high-level meeting took place between the officials of Prime Minister's Office (PMO) and Finance Ministry on March 3 where in EPF tax proposals were discussed. In fact, Jaitley in his Budget for 2016-17 had proposed that 60 per cent of the withdrawal on contribution to employee PF made after April 1 this year will be subject to tax.
This would apply to superannuation funds and recognised provident funds including EPF. The Government, however, has drawn flak from all corners on the proposal to tax part of EPF withdrawals, saying that it is not for all subscribers of such schemes and there would be exemptions. As far as trade unions' concerns are concerned, Sachdev said the issues listed for discussion include organisational restructuring of EPFO.
Besides, the board will vet proposal for increasing the number of days for borrowing of funds from Collateralised Borrowing and lending Obligation (CBlO) for participation in primary auctions of the Government securities and corporate bonds to 30 days from 15.
The trustees will also take stock of the investment in Exchange Traded Fund (ETF). EPFO has started investing in ETF in August last year. The body has planned to invest over Rs5,000 crore in ETF in the current fiscal.